READ TIME: 3 minutes
You can have visually stunning events, the most satisfied clients, and the most enthusiastic staff, but if your pricing isn’t accurately reflecting your value, you could be losing revenue. While a fixed fee is the most common pricing model among event planners, it can often leave money on the table. Determining if a fixed fee pricing is best for your business, or for a particular type of client can ensure that your client understands your worth and you are making the money you deserve.
Here are some pros and cons to determine whether a fixed fee is right for your business.
Fixed pricing is easy to justify and exudes trust with the client. Clients like that the amount is fixed up-front (vs. hourly), and can project their budget in advance.
As an itemized flat fee, your client knows what they are paying for and what they are getting.
Protects Your Reputation
In a fixed pricing model, your reputation isn’t on the line if a vendor screws up. By contrast, if you are marking up a vendor, and the vendor makes a mistake, you may be held responsible.
Cannot Raise Fees
With a fixed fee you won’t be able to raise fees if the client or event becomes more complex, increases in scope, etc.
The Big Number
With a big lump sum your client may worry about showing their boss your fee. They could come back by saying, “That’s what they pay me for”, in regards to one big fat event management line item on their budget.
If you do choose fixed fees as your primary pricing model, discuss up front that your fee is based on the time it will take you to complete the scope of work. Be sure to be transparent when it comes to what will trigger fee increases, and itemize your scope of work as clearly as possible.